Offering Credit to Clients
Offering advice in which people must trust you requires that you trust them as well. This means extending credit to your clients. Some consultants require prepayment for the initial consultation or purchase, then place the client on a net-thirty-days credit policy.
Common terms of payment for consultants include:
Payment on receipt of weekly, biweekly, or monthly invoice
Advance payment of weekly or monthly retainer, offset against weekly or monthly invoices for actual time
Advance payment equal to a percentage of total fixed fee
Total fee payable on completion of job
Many offer payment by credit or debit card. Using credit card services, such as Visa, MasterCard, American Express, and Discover, can transfer bad debt problems to others and increase cash flow for your business. However, consider that you will need to pay an initial set-up cost and ongoing service charges. The credit card service will charge you between 2 and 5 percent on each transaction. Talk with your banker about offering your clients the option of paying for services with their credit card. Ask about a merchant account.